Agenda item

Internal Audit update report

To update the Committee on progress with the Audit Plan, May to August 2014 (report of the Head of Audit and Risk Management, Audit Lincolnshire, and the Finance Manager (S151) enclosed).


Consideration was given to the report of the Head of Audit and Risk Management (Audit Lincolnshire) and the Finance Manager (S151), which updated the Committee on progress with the Audit Plan for the period May 2014 to August 2014. 


The purpose of the report was to:


·        Advise of progress being made with the 2014/15 Audit Plan;

·        Provide details of the audit work during the period;

·        Provide details of the current position with agreed management actions in respect of previously issued reports;

·        Update the committee on any changes to the 2014/15 Audit Plan and any other matters that may be relevant to the Governance and Audit Committee role.


Actual progress to date was less than expected however, the majority of audits were planned towards the latter half of the year and more progress would be seen then.


The assurance levels provided for 2014/15 had been amended in response to the introduction of other UK Public Sector Internal Audit Standards and were based on the Institute of Internal Auditors professional practice.  The changes helped auditors focus on the significance and importance of the activity in their opinions and recognised that auditors could not given absolute (Full) assurance.  The new levels of assurance were:


·        Effective

·        Some improvement needed

·        Major improvement needed

·        Inadequate


Three final reports had been issued since the last Committee:


·        Recruitment and Retention received ‘Some Improvement Needed’ Assurance

·        2013/14 Business Continuity Audit received Limited Assurance (‘major improvement needed’ under the new criteria)

·        2013/14 Accounts Payable received Substantial Assurance (‘some improvement needed’ under the new criteria)


For the Business Continuity Audit, the key messages were:


·        Completion of all Business Continuity Plans required

·        Promotion and embedding of processes with greater emphasis placed on Business Continuity Management at senior management level

·        Regular exercising of the Business Continuity Plans

·        Training on Business Continuity for all staff 


Progress with the implementation of agreed management action on recommendations for previous audits resulting in ‘No’ or ‘Limited’ assurance (and now ‘Major Improvement Needed’ or ‘Inadequate’) was followed up and reported in Appendix 3 to the report.  A more robust follow up was undertaken for audits with Limited Assurance or Major Improvement Needed.


In the audits given ‘Some improvement needed’ or ‘Effective’ Assurance, it had been confirmed that the Council had sound processes in place for the Recruitment and Retention Internal Audit, the Welfare Reform Follow up and the Accounts Payable Internal Audit.  More information on the outcomes of these audits were detailed within the report.


It was confirmed that 2014/15 audits in progress were Housing Benefit Subsidy, CPBS Corporate Governance and ICT.  There was one remaining 2013/14 audit at draft report stage, Payroll, which was provisionally Substantial Assurance. 


Finally, a number of other matters were detailed:


·        CIPFA Better Governance Forum – Audit Committee Update Issue 14 – helping audit committees to be effective.  Members were provided with a copy of this latest update.

·        County-Wide bid for Government Counter Fraud funding – Audit Lincolnshire was working with the Finance Directors of all the Lincolnshire Districts to submit a joint bid to the Government for additional one-off counter fraud funding.  The bid deadline was early September and an update would be provided when the results were known.  Members were advised that a response should be received by the end of October.

·        Effective Audit Committee Workshop (7 November 2014). Members had received an invitation to this training, and five of the Committee confirmed that they would attend.


Members considered the information and the following issues arose:


·        Recruitment and Retention – How could applicants be encouraged to the South Holland area to work for the Authority, when it was not perceived as attractive in comparison to other areas?

  • The Head of Audit and Risk Management responded that the audit was not looking into attracting talent into the area, it was an audit of the recruitment process in general.  The Executive Director (Place) added that audit’s role concerned the framework around recruitment and that Scrutiny would be the appropriate committee to look into the issues around attracting individuals into the area for employment.


·        Why was progress on the current year’s audit behind schedule?

  • The Head of Audit and Risk Management responded that it was not unusual for progress to be at this level at this point.  Progress at around 29% would be expected and she had therefore allocated more resources to this work.  She was in regular contact with the Finance Manager (S151).


·        What process was being used to address issues around Business Continuity?

  • The Executive Director (Place) advised that a test of the Emergency Plan was being undertaken in October, and activity was currently taking place.  The revised completion date for recommendations, as agreed by Audit and the Community Development and Health Manager, was December.  Business Continuity was high on the agenda for the Director and for other officers. 


·        IT shutdown was an issue relating to Business Continuity.

  • The Council’s requirement for technology had to relate to resiliance, security of data and a contingency plan that enabled systems to be recovered in the event of an emergency.




That the report be noted.






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